Saturday, October 29, 2005

Keep On Booming

(I thought I’d post an excerpt from testimony I gave to the WHCoA: the White House Conference on Aging. I tried to use language that might appeal to the current political regime. =)

Every 60 seconds, a baby boomer turns 60. In thinking about the aging demographic in America, let me approach the issue as a capitalist. Rather than regarding the burgeoning ranks of “retirees” as an economic sink of subsidies, I see an enormous market and an untapped opportunity. Many marketers are realizing the power of the boom, and some of our largest investors have made their fortune attending to the shifting needs of the boomers.

Aging boomers are numerous and qualitatively different. Compared to an older generational cohort, the average boomer is twice as likely to have college degree and 3x as likely to have Internet experience.

Envision a future where many aging boomers are happily and productively working, flex-time, from home, on tasks that require human judgment and can be abstracted out of work flows.

Fortunately, we are clearly entering an information age for the economy. The basis of competition for most companies and all real GNP growth will come from improvements in information processing. Even in medicine and agriculture, the advances of the future will derive from better understanding and manipulation of the information systems of biology.

In short, the boomers could be America’s outsourcing alternative to off-shoring. The Internet’s latest developments in web services and digital communications (VOIP and videoconferencing) lower the transaction costs of segmenting information work across distributed work organizations.

There is a wonderful economic asymmetry between those who have money and those who have time, between those who need an answer and those with information. This is a boomer opportunity. Imagine a modern-day Web librarian. Think of professional services, like translation, consulting or graphic arts. The majority of economic activity is in services, much of which is an information service, freely tradable on a global basis. Imagine an eBay for information. Boomers may be the beneficiaries.

The free market will naturally exploit opportunities in secondary education and retraining, telecommuting technologies for rich communication over the Internet, web services to segment and abstract workflow processes and ship them over the network to aging boomers, and technology to help all of us retain our mental acuity and neural plasticity as we age. Lifelong learning is not just about enlightenment; it’s an economic imperative.

Where can the government help? Primarily in areas already entrenched in regulation. I will point out two areas that need attention:

1) Broadband Access. Broadband is the lifeline to the economy of the future. It is a prerequisite to the vision I just described. But America trails behind twelve other countries in broadband adoption. For example, our per-capita broadband adoption is less than half that of Korea. The Pew Internet Project reports that “only 15% of Americans over the age of 65 have access to the Internet.”

Broadband is infrastructure, like the highways. The roads have to be free for innovation in the vehicles, or software, that run on them. Would we have permitted GM to build the highways in exchange for the right to make them work exclusively with GM cars? Would we forbid he building of new roads because they compete with older paths? Yet that is what we are doing with current broadband regulation.

2) Reengineering the FDA and Medicare. No small feat, but this should be a joint optimization. Medicare has the de facto role to establish reimbursement policy, and it often takes several years after FDA approval for guidelines to be set. This could be streamlined, and shifted to a parallel track to the FDA approval process so that these delays are not additive.

Why is this important? We are entering an intellectual Renaissance in medicine, but the pace of progress is limited by a bureaucracy that evolves at a glacial pace, relative to the technological opportunities that it regulates.

The FDA processes and policies will need to undergo profound transitions to a future of personalized and regenerative medicine. The frustration and tension with the FDA will grow with the mismatch between a static status quo and an exponential pace of technological process. Exponential? Consider that 80% of all known gene data was discovered in the past 12 months. In the next 20 years, we will learn more about genetics, systems biology and the origin of disease than we have in all of human history.

The fate of nations depends on their unfettered leadership in the frontier of scientific exploration. We need to explore all promising possibilities of research, from nanotechnology to neural plasticity to reengineering the information systems of biology. We are entering a period of exponential growth in technological learning, where the power of biotech, infotech, and nanotech compounds the advances in each formerly discrete domain. In exploring these frontiers, nations are buying options for the future. And as Black-Scholes option pricing reveals, the value of an option grows with the range of uncertainty in its outcome.

These are heady times. Historians will look back on the upcoming nano-bio epoch with no less portent than the Industrial Revolution. If we give our aging boomers free and unfettered broadband access, and our scientists free and unfettered access to the frontiers of the unknown, then our greatest generation, when the look to the next, can take pride in knowing that the best is yet to come.

19 Comments:

How could the administration not like what you propose? Unless, of course, telcos donate to their coffers.

ACC2005 had two speakers that addressed health, key to keeping our aging boomers healthy enough to participate in the economy. You commented on Daniel Amen's talk on brain health (yes, I still ride my road bike...cautiously). Did you see T. Colin Campbell's talk on the China Study? It was quite damning of animal protein. Your thoughts on that?

Off topic: John Smart talked about technology roadmapping when he was up for the Foresight Conference (see entry for "John Smart in the Library of Babel" at http://knowledgecontext.blogspot.com), which may tie in with the Technology Roadmap for Productive Nanosystems.

Boomers use computers and buy for their grandkids. But they don't usually follow the latest trends and don't care so much about technology. Software that meets that market on its terms--affordable, easy to use, low learning curve--will do very, very well. So what software? Email, news aggregation, maybe blogging, fundraising software (of course, because more people volunteer), contact management, personal medical records management, retirement management, etc.

Also--Yes, the FDA is inefficient. Aside from that, a single-payer healthcare system would be much more efficient than the current one, and is likely the only way we'll effectively deliver adequate healthcare in an affordable way as a country. (healthinsurancefreedom.com)

I just did an info economy type job for my son's start up and I'm just a bit old to be counted as a baby boomer. There are heaps of boomers with advanced computer skills as well as those who can draw blood with the standard apps like WP, SS and DBs. My ex mother in law is in her 90s and still makes computers out of bits she buys on e-bay. Give us wrinklies real info jobs to and a lot of us would thrive.

As to the holy grail of single payer I'm an American but I live in Australia where we have a national health system but no single payer. We have the choice of going private or sticking with the public system The competition between the two systems actually helps keep both efficient. Single payer = no competition. I don't think that leads to efficiency. Think about it. Lgude Perth Western Australia

Steve,FDA is not the only drag on the "intellectual Renaissance in medicine". Smart people like you can see emerging technological capabilities and connect the dots into revolutionary visions, however, the reality on the ground is much more frustrating. I doubt that the baby-boom generation will gain huge benefits from it.

The mindset in the medical establishment (doctors, insurers, even big pharma) is nothing like the mindset of the IT-geek populace that was driving the digital revolution. These people are slow, risk-averse and mentally lazy.

Also, the business leaders in biotech, who should be pushing this Renaissance forwards, are nothing like the business leaders in IT. They hate innovation and creativity. This is my personal experience. I am a founder of a nano/biotech startup and I lost my battle with the hired CEO and BOD to develop a cheaper and better product sooner. Reason: it's not in the business plan.

Nobody can stop progress, however, bureaucracy, mental laziness and aversion to innovation can substantially slow it for the baby boomers to benefit substantially.

For me personally, the lesson after reading the J curve is pretty clear: insist on Steve Jurvetson to be on the Board for my next startup.

At one time communities would seek counsel from the elders on matters of import. More experience usually translated into lessons learned. Having survived my share of crises, I am still around to share a thought or two. The main lesson is to never stop learning. Reading is good as is seeking other points of view and new ideas like visiting your blog. Finding what is ultimately important leads one to appreciate actuality, efficiency and mindfulness. Helping others to see some of the forest through the trees is another. lifestyles

I had missed this post from you in time and today I read it. Casually I have raised up the concern on "what to do with an increasingly older world population" but in the frame, specifically, of a conversation on Health Care services in the US.

You will read for my comment there, that your post here -and the comments it aroused- is welcome to me as a positive outlook on how to deal with this phenomena, to happen necessarily in the incoming years.

At the conversation I linked I pointed out another link that it can be good to contribute with here too:

""In 1950 there were only 131 million people of age 65 and older; in 1995 their number had almost tripled and was estimated at 371 million. Between now and 2025 the number will more than double again; and by 2050 we will probably have more than 1.4 billion elderly worldwide (see Figure C1_7). The percentage of elderly increased from 5.2 in 1950 to 6.2 in 1995. By 2050 one out of ten people worldwide will be 65 years of age or more."

Bottom-line: Even when the possible benefits and changes of perspective on how to tread this social change may not actually affect the boomers´ generation itself, I believe that starting somewhere in the timeline with the changes -the least beginning to create increasing awareness of this as you are doing here- is a positive thing in itself that will impact the future (of the "elders" and of all the community members as a whole, as an anon already marked in a comment above).

Necessarily as I see it, if retirement age is not extended in the next years (from 60/65 to 70), such an expected amount of retired people (who get their retirement while reaching this age physically and mentally apt) will have to become self-sufficient in order to generate an income other than the pension, for the active working force won´t be enough (read: the pressure on high taxes on their income will be unbareable)) to support the retirement system as it worked till today (I personally think it is not working ok already; that retired people can´t live on their pensions alone, so with the years I would just expect an scalable projection). A thoughtful and responsible while possible revision is called for. Soon.

"the advances of the future will derive from better understanding and manipulation of the information systems of biology"

While this is absolutely true, we might wish to point out that the very definition of "information", by Shannon (the negative logarithm of probability) does not apply to biology.

How can we "better understand" the "information systems of biology" without laying down a new foundation for "geometrization of biology"?

(A trivialized example: for a digital camera every picture taken is e.g. a 4 Megapixel information; independent if the shot is a "blank", shows your mother, or shows a tree. For your retina, the "biological information" is zero, info contents about your mother depends on if it is an old picture that you have seen a zillion times - or shows her face with injuries suffered in an accident a minute ago. The info contents of the tree are known to be compressed by a fractal algorithm in the range of 5-30,000.

While for the biological system of vision the above is well-established (e.g. by late David Marr, 1982), the "information system of (human) DNA" (what *else* is DNA if not an "information system"???) we are at the horrendously primitive stage of some still considering 98.7% of it "Junk" - to be discarded.

The mathematical (fractal) underpinning of DNA will do to the PostGenetics part of Genomics, what Quantum Mechanics did to the Nuclear Physics part of Physics.

The stakes are different. For Quantum Mechanics the dubious social yields are the bomb and the pollutant energy.

For PostGenetics, the social yield is understanding (and therefore to be able to treat or even cure) 150,000+ "JunkDNA diseases" - not caused by any "gene", but hundreds of millions dying.

Best article to read is in New York Times, 7th of Feb, 2006, clipped and commented inhttp://www.junkdna.com/new_citations.html

I have not at hand my blog settings, anyway that blog is "poli" a philosophy, more than a technology.

Yes, you are right, the future is here and it's not drawn by old GDP or industrial work, these are only old tracks helping us to point ahead, but these are also useless backgounds when we go for what we will be tomorrow. I say: tomorrow.

The future is in redesigning the social pattern and give it the ability to reassess under, more than grow higher that never ever any sky had had space to keep inside, this old dream.

Internet let's everybody of us explore our identity, this makes the difference.

I'm in my mid 20s so I am very interesed in the potential "curse" of a top-heavy mass of baby boomers demanding an unrealistic tax burden on a smaller, younger population base.

I agree whole-heartedly with Steve that we have to find ways to bring the aging members of the populace into the online marketplace...if we don't they will be left at the mercy of second wave systems that won't be capable of supporting them and they will destablize everyone else.

I am currently in the process of building a system where we match service professionals on the ground with a network of VoiP sales personnel. The sales people can be anywhere thanks to Voip...(reference specifically Skype.com's recent move to make all calls in North America free of charge until the end of this year) and financial remuneration is based purely on a percentage basis...so no tension between first world vs third world wage differentials. An 81 year old grandmother in Iowa would make the same return on a sale as a 16 year old boy in the Phillipines.

I think that this must be the future of commerce...remuneration must be directly linked to productivity. I am aware of the socially cohesive forces of social security systems but it would seem that the days of nation states are numbered...how can they survive when commerce is becoming increasingly international, difficult to track and therefore tax? The cohesive force of the future (and now for that matter), will be and already is programs that systemize and facilitate the interactions between people. Ie. Google, Skype, Myspace. These sites...one a search engine, one a telephony provider, one a social networking site; facilitate a faster, easier connection between people and the services/information they wish to provide and ultimately act as extremely disruptive forces on established power structures. This will only accelerate and ultimately these digital organisms will form the virtual 'nation-states' of the future.

I'm just a bit old to be counted as a baby boomer. There are heaps of boomers with advanced computer skills as well as those who can draw blood with the standard apps like WP, SS and DBs. My ex mother in law is in her 90s and still makes computers out of bits she buys on e-bay and be in online conferencing with here grand daughter at web design company NY, all by herself.

Many online today are of certain age with free time and little to do and the Internet is a huge resource for them as a site designer for webdesign leeds we find more and more sites targeted to older age groups as these are now becoming more prominent online.

This demographic tidal wave will have a greater effect on institutions and businesses than the aging of any previous generation. Because of the size and spending power of the boomers, mature values and trends will dominate marketplace realities.

During the Past three decades, boomers have made substantial monetary contributions to health and fitness companies, such as Nike and Bally’s. As the boomers became fitness devotees during the 1970s and ‘80s, they enabled these companies to enjoy substantial growth.

Many of the leading fitness brands have forgotten their legacies, however, often ignoring the generation that propelled their early growth. Nike, for instance, has lost customers to New Balance, an athletic-shoe company that has been successful at building its brand image around middle-age themes. Likewise, Bally’s has lost opportunity to Curves, one of the fastest-growing franchises targeting middle-aged women.

Boomers will increasingly pursue fitness as a way to forestall the impact of aging. Less obvious will be emerging fitness drivers such as the desire to stay vigorous for grandchildren, undertaking intense physical preparation prior to adventure vacations and learning expeditions, and keeping fit to improve cognitive health and memory. By addressing such drivers, companies can distinguish themselves from the competition and gain the loyalty of boomers who feel left behind by other brand.

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For the daily blog, see flickr. Or get both with the RSS Feed from FeedburnerWhat is the J-Curve? The IRR curve over time for an early stage VC fund – that period of time in advance of mass-confirmation of a new idea. For fans of Kurzweil's curves and exponentials in general.